At up to 50%, cars in India suffer among the highest tax rates globally

Cars and two-wheelers attract 28% GST and a cess in the range of 3-22%, taking the effective tax rate to up to 50%

In the goods and services tax (GST) regime, India levies one of the highest taxes on vehicles among key world markets when compared with the GST equivalent value-added tax (VAT) levied in other countries.

Cars and two-wheelers attract a GST rate of 28 per cent in India and a cess that ranges from 3 to 22 per cent, taking the effective tax rate to up to 50 per cent. 

The GST was implemented in July 2017 and subsumed a host of indirect taxes, including excise duty, VAT and entertainment tax.

The GST issue on automobiles — that has often been a contentious issue